Connecticut unemployment rate drops, but some remain cautious

Published
5:51 pm EDT, Thursday, June 18, 2015

WETHERSFIELD >> Employers in Connecticut added 6,400 jobs last month and the state’s unemployment rate dropped slightly, but an economist and business leaders said Thursday that there is evidence of a storm gathering on the horizon.

“This jobs report is yet another validation of our progress — because of our efforts, Connecticut’s economy is growing, job numbers are steadily improving, and employment is reaching heights that it hasn’t in decades,” Malloy said in a statement. “Our efforts are focused on delivering long-term growth and prosperity, and we are committed to continuing our efforts to move Connecticut forward, because we believe everyone in our state who wants a job should have one.”

To illustrate his point, the governor noted that with the jobs that were added in May, the state’s labor force grew to 1.92 million, its largest level since 1976. The decline, Malloy said, has put Connecticut’s unemployment rate at its lowest level in almost seven years.

The unemployment rate has dropped to 6.0 percent – the lowest point since August 2008. The state has added 13,700 jobs over the first five months of this year, a nearly 8 percent increase over the 12,700 jobs that were added during the same period in 2014.

But even with the overall job gains, Connecticut’s manufacturing economy took a hit last month, losing 1,000 jobs.

In a joint statement released Thursday, Republican Senate Minority Leader Len Fasano, R-North Haven, and Senate Minority Leader Pro Tempore Kevin Witkos, R-Canton, called the May jobs gain “a slight uptick,” and urged Malloy to rethink the state budget during an upcoming special session of the legislature.

“Unfortunately, these numbers cannot rectify the damage that has been done as a result of the budget negotiated by the governor and legislative Democrats,” the two lawmakers said. “We cannot lose sight of the realities that surround us today. Hospitals are cutting jobs across the state, large employers are considering moves out of state, and other states are courting away our businesses and our jobs.”

The biggest employment gains came from trade transportation and utilities sector, which added 3,200 jobs. The opening of the new outlet shopping center at Foxwoods was cited by the state Labor Department as the reason the state added 1,900 retail trade positions.

Two of the state’s four major labor markets had employment gains in May. The Hartford area added 5,000 jobs while the New London area added 1,300. But the New Haven labor market lost 1,100 jobs in May while the Bridgeport-Stamford-Norwalk saw a decrease of 1,500 in the number of individuals who were employed.

Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, said the state’s budget crisis is likely to produce “severe headwinds” that could lead to problems in the future.

“I’m decidedly less optimistic than I was earlier in the year,” Klepper-Smith said. “The economics are clear: We need to do everything possible to keep our present manufacturers in Connecticut, meaning we need to keep Sikorsky here, keep UTC here, keep Electric Boat here, keep GE here. If we do not, then the state’s non-manufacturing sector will suffer, and we all lose.”

He said the state has actually seen the number of unemployed in five of Connecticut’s largest cities — Bridgeport, Hartford, New Britain, New Haven and New London — grow by 5,724 to 21,854 over the seven-year period from April 2008 to April 2015, a 35.5 percent increase.

Pete Gioia, vice president and economist for the Connecticut Business & Industry Association, said the state has only recovered 82 percent of the jobs it lost during the last recession.

“And at the pace of recovery, it will be June of 2016 before we hit the 100 percent mark,” Gioia said in a statement. “We are still far below the U.S. rate of job recovery and even more below neighboring state Massachusetts.”